Magic City ends 2016 home sales on high note, up 11 percent over 2015

Magic City ends 2016 home sales on high note, up 11 percent over 2015
The median home sales price for metro Birmingham was up 7.7 percent in December from a year earlier. (iStock)

Click here to view or print the entire monthly report compliments of the ACRE Corporate Cabinet.

Sales: According to the Greater Alabama Multiple Listing Service, the Birmingham metro area residential sales totaled 1,071 units during December, 6.5 percent above the same time last year. Total 2016 home sales through December rose 11 percent over 2015 sales. Two more resources to review: Quarterly Report and Annual Report.

For all of the Birmingham area’s housing data, click here. 

Birmingham home sales in December up 6.5 percent over the same period in 2015.
Birmingham home sales in December were up 6.5 percent over the same month in 2015.

Forecast: December sales were 60 units or 6 percent above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE’s year-to-date sales forecast projected 13,460 closed transactions, while the actual sales were 14,705 units, a favorable difference of 9 percent.

Supply: The Birmingham-area housing inventory in December was 6,190 units, a decrease of 7.3 percent from December 2015 and down 51 percent from the December peak in 2007 (12,642 units). December inventory in the Birmingham metro area also decreased 4.7 percent from November. This direction is consistent with seasonal patterns and historical data indicating that December inventory on average (2011-15) decreases from November by 6.8 percent.

According to the Greater Alabama MLS, in the Birmingham metro-area market, there were 5.8 months of housing supply during December, down 13 percent from 6.6 months of supply during December 2015. The “months of housing supply” is a simple calculation – homes listed (supply) divided by homes sold (demand). In general, about 6 months is considered the point of equilibrium during December.

Demand: December residential sales decreased by 0.3 percent from the prior month. This direction contrasts with historical data indicating that December sales, on average (2011-15), increase from November by 15.9 percent.

Existing single-family home sales accounted for 79 percent of total sales, down from 81 percent in December 2015, while 18 percent were new home sales (up from 15 percent) and 3 percent were condo sales (down from 4 percent).

Pricing: The median sales price in December was $188,500, an increase of 7.7 percent from December 2015 ($175,000). The December median sales price decreased 0.5 percent from November. This direction contrasts with historical data (2011-15) indicating that the December median sales price on average increases from November by 3.2 percent. Pricing can fluctuate from month to month as the sample size of data is subject to seasonal buying patterns. ACRE recommends consulting with a local real estate professional who has access to pricing data at the neighborhood level.

Industry perspective: “The tenor of our forecast effectively remains unchanged: signs of cautious consumers this quarter, rising interest rates, the renewed increase in the U.S. dollar to a 14-year high, and heightened uncertainty in the political sphere suggest conservatism in our outlook,” said Fannie Mae Chief Economist Doug Duncan. “While we are encouraged that confidence is rising across investors, consumers, businesses, economists and homebuilders, much of it appears to be in anticipation that the forthcoming Administration and the new Congress will enact fiscal policies and deregulation that will help spur growth. While we believe that some pro-growth policies could be adopted next year, it would take time for them to benefit the economy, barring any offsetting initiatives such as more restrictive trade policies.”

Click here to generate more graphs from the Birmingham December Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply. 

The Birmingham Residential Monthly Report is developed in conjunction with the Greater Alabama MLS and the Birmingham Association of Realtors to better serve Birmingham metro area consumers.

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